These companies, originally
structured as Canadian royalty trusts (CANROYs),
are oil and natural gas producers. As trusts, they didn't pay federal
income taxes if they distributed their income to shareholders. The
resulting double-digit dividend yields grabbed dividend investors’ attention
in the mid-2000s. Eventually the government cracked down and
starting in 2011, trusts were required to pay the same taxes as regular
corporations. Consequently, all trusts converted to corporations, and
many cut their dividends.
This table summarizes what happened.

Trust Corporate Conversion Scorecard

Trust

Announce Date

Conversion Date

Dividend Change

Advantage

3/09

6/09

-100%

ARC Energy

5/10

12/31/10

0%

Baytex Energy

5/10

12/31/10

0%

Bonavista Energy

5/10

12/31/10

Bonterra

8/08

11/08

-18%

Canadian Oil Sands

4/09

12/10

-60%

Crescent Point Energy

7/09

7/09

0%

Daylight Resources

1/10

5/10

-38%

Enerplus Resources

5/10

12/31/10

0%

Enterra

1/10

5/10

no dist.

Fairborne Energy

10/07

12/07

-100%

Freehold Royalty

5/10

12/31/10

0%

NAL Oil & Gas

5/10

12/31/10

-22%

Paramount

3/10

6/30/10

0%

Pengrowth

5/10

12/31/10

0%

Penn West

9/10

12/31/10

-40%

Peyto Energy

5/10

12/31/10

-50%

Progress Energy

11/08

1/09

0%

Provident Energy

6/10

12/10

-25%

Trilogy

12/09

2/10

-30%

Vermillion Energy

5/10

9/1/10

0%

Zargon Energy

3/10

12/31/10

-22%

U.S. Tax
ConsiderationsIf you're a U.S. citizen, Canadian
corporations withhold 15% of your
dividends deposited in regular accounts for Canadian Taxes. However,
that deduction does not apply to tax-sheltered accounts such as IRAs.
For regular accounts, you can apply for
to the U.S. IRS for a
refund (foreign tax credit) for at least a portion of the amount withheld.Many Canadian
firms provide information for income tax filing instructions for U.S.
unitholders on their Websites. Nevertheless, U.S. investors should consult with a qualified tax advisor before
investing.

Canada
E&P Listed On U.S. Exchanges

Most Canadian
energy stocks are listed only on the Toronto stock exchange. However,
the following are also traded on either the NYSE or AMEX.

Baytex Energy (BTE)

Enerplus
Resources Fund (ERF)

Pengrowth Energy (PGH)

Penn West Energy (PWE)

Provident Energy (PVX)

Canada
Energy E&P (Toronto Stock Exchange)

Here are the
major energy exploration and production stocks listed in Toronto.